America's heartland is the epicenter of the housing-affordability crisis

Rural America faces a severe housing affordability crisis, with home prices rising 61% from 2019 to 2025, outpacing suburban and urban areas. Pandemic-driven demand from out-of-town buyers has pushed prices beyond local buyers' reach. Rural buyers now need a $75,000 annual salary to afford a median-priced home, up from $36,000 pre-pandemic. Despite high mortgage rates, rural areas remain attractive, but local incomes haven't kept pace with rising prices, exacerbating the crisis.

By Aarthi Swaminathan It has become increasingly difficult for rural Americans to buy a home Rural buyers are feeling the toll of high prices, as pandemic-driven home purchases from out-of-towners have pushed homeownership far beyond their reach. Home prices in rural America are rising faster than in suburban and urban areas, deepening the affordability crisis in America's heartland. In rural counties across the U.S., the median sales price of a home rose 61% - from $175,000 in the third quarter of 2019 to $281,000 in the third quarter of 2025. In contrast, homes in suburban and urban areas have seen a 49% and 46% gain in prices, respectively, over the same period, according to a new report by real-estate brokerage Redfin. In recent months, home-price growth has decelerated, but America still faces a deep housing-affordability crisis. Most buyers find the current market too expensive, due to elevated mortgage rates and home prices that hit a record high earlier this year. But rural buyers are feeling high prices more acutely, as pandemic-driven home purchases by out-of-towners have pushed up local prices and put homeownership far beyond their reach. To afford a median-priced home in their area, today's rural home buyers would need to make an annual salary of $75,000. That's up from $36,000 six years ago, before the pandemic, which is a 106% increase. The median household income in rural counties at latest count was about $70,000. Redfin categorized areas as rural using a classification system that's also used by the U.S. Centers for Disease Control and Prevention. During the pandemic, "we had a lot of buyers come in from other markets" such as New York, Texas, or even from as far away as California or Seattle, Julia Martinage, a Bedford, N.H.-based real-estate agent with Redfin, told MarketWatch. Buyers who worked remotely wanted "land, chickens, quiet," she noted in the Redfin report. Out-of-state buyers had bigger budgets than locals, she added, which meant that they could outbid rival buyers on homes and push up prices overall. Low inventory has also contributed to rising prices: "Rural areas often only have a handful of homes for sale, meaning homebuyers frequently compete with one another - another factor that drives up prices," Redfin said in the report. Rural areas are still attractive to buyers, which could keep home prices high for the time being. In spite of mortgage rates being elevated in 2024, a separate report by housing-finance giant Fannie Mae found that mortgage applications in rural communities remained above pre-pandemic averages. But people who were applying for mortgages to buy homes in rural areas were less likely to be local buyers, the report found. The share of mortgage applications submitted by locals fell during the pandemic and have not yet returned to previous levels. In rural parts of New Hampshire, home buyers need to earn an annual income that's 141% more than the salary required before the pandemic to afford a median-priced home, at about $120,000, Redfin found. That's the biggest increase among all the rural areas Redfin analyzed. Vermont and Maine follow behind New Hampshire in terms of the amount of salary needed to buy. But rural incomes haven't grown as fast as home prices have surged. Rural communities have seen persistently lower salaries than their suburban and urban counterparts. In August 2025, rural workers earned about 84.5% of what urban workers made, which was roughly the same - 84.1% - as in August 2019, according to researchers at the Federal Reserve Bank of New York. Certain rural communities tend to have older residents, which partly explains why incomes are lower. About a quarter of the U.S. population lived in rural areas as defined by one analysis by the U.S. Federal Housing Finance Agency in December 2024. About 20% of the rural population is aged 65 and older, compared to about 16% in non-rural areas, the agency noted. If the share of seniors in rural areas continues to grow, it could "pose economic challenges," the FHFA said, with a larger share of the population being retired, as opposed to being employed. -Aarthi Swaminathan This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires 11-20-25 1133ET